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Selling products for a manufacturer on a web site

3:47 am on May 7, 2001 (gmt 0)

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WebmasterWorld Senior Member marcia is a WebmasterWorld Top Contributor of All Time 10+ Year Member

joined:Sept 29, 2000
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In another thread [webmasterworld.com] in this forum, Kerrace_Alexander asked a question about affiliate programs, in addition to another product issue, which I believe is a whole different subject. Here's the excerpt from that thread:

"I was approached by a local distributor who has alined himself with a local manufacturer to sell a new line of 100% skincare products.

He has his own advertising business but it's clear he sees selling these products as an excellent opporunity. He's doing a lot of focus groups presently, but he's need some help in developing his business online.

I have convinced him that affliate marketing is the way to go and I am to put a proposal together to show him how we could work as a team using the internet, he developing a merchant program for me as the exclusive affiliate.

He's willing to develop my site,along with his. Although he has experience developing web sites he has not developed an ecommerce site, hence he has no ecommerce background.

He's proposing to offer me an exclusive affiliate marketing but for 25% of revenue soled on the net."

To offer participation in an affiliate program to other site owners, there would first have to be the original web site created to market the products. Essentially, the simplest way to do this is to first do the original site, and then sign up with a company like Commission Junction to administer all aspects of the program - payments, tracking, etc. if an affiliate program is to be expanded.

The issue here, however, is protection for the person doing the original site, and ensuring that they will receive fair compensation for the effort it will take. Who will own the site itself, including the domain name?

It would seem that the distributor making the offer, who will probably be getting 50% of sales by my guess, if retaining ownership, could, in the absence of an air-tight contractual situation, have someone set it all up, and then take it over himself, thereby eliminating any further payments.

So 25% of gross sales, or gross or net profits (which it was wasn't specified) for the beginning, most difficult phase of the operation, does not seem to be adequate reward for the effort that will be required. He could change course mid-stream, and eliminate the person who put in all the original effort in the first place.

So the question with this, as I see it, is how to set up some sort of an agreement with the manufacturer or distributor, to do a site that the person themselves owns, and sell the products for the manufacturer/distributor, on a wholesale or drop-shipment basis.

Unrelated to the possible setting up of affiliate programs in the future, what would be the mechanics of setting up a site to sell a specific line of products for a manufacturer or exclusive distributor? How are payments and shipments handled, ideally, in this type of a situation? How would invoicing and billing best be handled, for the protection of the person doing the web site?